NewsLocal News


Trial for Arroyo Grande couple accused of defrauding $1.3M in Covid-relief funds to begin

Department of Justice
Posted at 4:34 PM, Jun 06, 2023

The trial for an Arroyo Grande couple accused of defrauding the federal government of more than $1.3 million in Covid-19-relief funds was set to begin in federal district court Tuesday.

Christopher and Erin Mazzei, 44 and 41 respectively, were charged with a four-count indictment in May of 2022 in connection with a scheme to defraud the government of Paycheck Protection Program (PPP) loan funds.

The charges included wire fraud, money laundering and conspiracy.

The couple received $1.365 million in PPP loan funds which they used for personal purposes. Those included a down payment on a condo in Kapolei on the island of Oahu, Hawaii, and two sport-utility vehicles, according to the indictment.

The Mazzeis submitted applications for PPP funds on behalf of three purported businesses to financial institutions in Pennsylvania, Maine and Hawaii which contained false IRS tax returns and payroll records.

The Mazzeis said in the loan applications that the PPP funds would only be used to retain workers, maintain payroll or make mortgage, lease or utility payments.

“Our entire community suffers when federal funds appropriated to provide critical pandemic relief are illegally diverted for personal gain,” said U.S. Attorney Clare E. Connors in the Department of Justice press release from last year. “We will pursue and prosecute those who defraud programs that provide a financial lifeline to struggling small businesses in Hawaii and across the United States during the COVID-19 pandemic.”

The condo on which the Mazzeis placed a down payment is a 3-bed, 3-bath, 1600-square-foot townhome in an Oahu gated community, estimated to be worth $1.16 million.

The United States Attorney’s Office for the District of Hawaii is prosecuting the case.

The Paycheck Protection Program, part of the CARES Act of 2020, was a government program meant to provide assistance to businesses affected by the Covid-19 pandemic. Qualifying small businesses and organizations could receive loans with a maturity of two years and an interest rate of 1%.